Friday, December 6, 2013 by Bill McCann

Council eases rules on delinquent utility bills

At the urging of advocacy groups and a tenacious City Council Member Kathie Tovo, the Council on Thursday approved an ordinance that gives additional breaks to residential utility customers having trouble paying their bills.

 

Supporters of the ordinance said the action would especially help in preventing customers with low and fixed incomes from having their electric service disconnected when they cannot keep up with their utility bills. The city already is considered to have one of the most flexible programs for delinquent utility bill- payers in the country.

 

The ordinance, which was introduced by Tovo, was approved on a 6-1 vote, with Mayor Lee Leffingwell the lone vote in opposition. The vote took place at the monthly meeting of the Council’s Austin Energy Committee, which doubled as a special-called meeting of the Council.

 

Leffingwell said that while he was sensitive to hardships facing some customers, he was concerned about the measure because its costs are unknown. He also pointed out that recent administrative policy changes by Austin Energy, which operates the city utility billing system, questioned the need for the ordinance. 

 

The ordinance, which takes effect immediately, applies to the entire city utility bill (electricity, water, wastewater, trash collection etc.), although the electric portion is what has gotten the most attention because of complaints about customers, especially old and poor people, getting their power cut off.

 

Austin Energy officials had voiced concern about the ordinance, saying that it would expand the number of customers who may delay payment, limit staff’s ability to negotiate repayment solutions best suited for individual customers, increase program costs, and create a cycle of perpetual debt through unlimited payment arrangements.

 

Austin Energy Deputy General Manager Kerry Overton cited figures showing  that a small percentage of customers actually get disconnected. In September 2013, for example, the number of disconnected customers was less than half of a percent of the utility’s total residential customers, he reported.    

 

But representatives of several groups, including Austin Interfaith, spoke in strong support of the ordinance. Some cited examples of people not only getting their electricity disconnected but being evicted from rental units in some cases because of the disconnection.  

 

Among other things, the ordinance requires the city to provide utility service if a customer has entered into a deferred payment agreement. Under such an agreement a customer will be able to pay off the delinquent amount over 24 months in equal installments, unless the customer and utility agree to a shorter period. Also, the city has to renegotiate a deferred payment agreement if a customer can show a bona fide need for payment relief, including a serious illness or injury, loss of employment or economic loss due to natural disaster. 

 

The ordinance could be especially beneficial to residential customers who participate in or who qualify for Austin Energy’s Customer Assistance Program for low-income residents. Participants in the program receive discounts on their bills, paid for by electric ratepayers. The ordinance specifies that the city must restore disconnected utility service to a customer qualifying for the assistance program if the customer enters into a deferred payment agreement. Furthermore, that customer would not have to pay a reconnection fee or pre-pay a deposit.

 

The ordinance also limits monthly payments for residential customers who qualify for the assistance program to 5 percent of the U.S. Department of Health and Human Services poverty guidelines for a single-person household, or $48 a month.

 

Austin Energy has been wrestling with the delinquent account/disconnection issue for some time and recently came up with new guidelines, in part as a result of concerns raised recently by Tovo and other council members, who have been receiving calls about people getting their power cut off. Austin Energy has put together a steering committee, including representatives of consumer and low-income support groups, to develop long-term policies.

 

But Tovo argued that something needed to be done now. In making her case for the ordinance, Tovo said it was intended as a “stop-gap measure” while the committee works things out.

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Key Players & Topics In This Article

Austin Energy: As a municipally-owned electric utility, Austin Energy is a rarity in the largely deregulated State of Texas. It's annual budget clocks in at over $1 billion. The utility's annual direct transfer of a Council-determined percentage of its revenues offers the city a notable revenue stream.

Austin Energy Customer Assistance Program: a utility-run program that offers discounts based on eligibility for low-income ratepayers, as well as those with "serious medical problems."

Austin Energy Utility Oversight Committee: The Austin City Council committee on Austin Energy was created in May 2013 to provide oversight of the city's electric utility. It's creation was marked by political maneuvering that ultimately resulted in a committee comprised of every member of the Austin City Council.

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